E-commerce Adoption by Formal Micro and Small Enterprises in Nairobi, Kenya

Abstract

The objective of the study was to identify the factors that influence the adoption and utilization of e-commerce by the micro and small sized enterprises (MSEs) operating within the NCBD. The research design adopted was a cross sectional survey. The study population comprised of all MSEs with formal premises registered with the Nairobi City Council operating within the NCBD. The main source of data was primary data. The primary data collection instrument was a structured questionnaire with both open and close ended questions developed by the researcher. The structured questionnaire was administered through personal interviews with the business owners or the managers of the businesses. The data collected was analyzed using the factor analysis statistical method to determine the combination of factors that were most appealing to MSE managers or owners. Descriptive statistics method was also used. This involved the use of frequency tables, percentages, rank ordering and mean scores. Frequency tables were used for arraying data obtained to facilitate working out percentages in order to address the objective of the study. The results show that MSEs in Kenya are sole proprietorships and are mostly operated by young people who have at least a secondary level of education and in most cases college education. The findings further indicate that of the four factors considered skills and IT knowledge levels of business owners and staff accounted for the greater adoption of e-commerce by formal MSEs in Nairobi Kenya. Arising from the study findings the researcher therefore recommends that the government should enact legislation to regulate the ICT industry in Kenya with a few of reducing the cost of ICT applications. The management of formal MSEs should also ensure that their employees are trained on ICT aspects.